THE ORIGIN OF MONEY
Anything called money, depends on the value people place on it whether as a
medium of exchange , unit of measurement or storehouse for wealth .
In general understanding, money is basically a concept – CZ, Binance.
All of the money in the world is estimated to be around $420trln.
MONEY AND CURRENCY
Money is an intangible concept while currency is the physical manifestation of the
intangible concept of money. Money can’t be touched while currency is the coin or
note that is presented in the form of money. Money are valued numbers , currency
are just notes ,coins or cards.
BARTER TO CURRENCY
Money has been practically in use for more than 4900 years.
Before then, we practically use barter systems (a direct trade of goods & services)
eg; when a shoemaker gives a farmer slippers in return for food items. But eventually
the barter system came with a lot of problems which includes but not limited to ;
a. Lack of double coincidence of wants.
b. Lack of standard of deferred payment.
c. Lack of common measure of value.
d. Difficulty in generalizing purchasing power.
Due to the fact that the barter system has shown many inefficiencies in being a
perfect store of value a new system was seen as a more perfect way to make
transfer of value perfect and easily sustainable. That was how the move to salt
,animal skins and weapons was adopted as the first currencies.
Move to the Currency
After the deficiencies that the barter system showed , a perfect was medium was
explored that was how eventually animal skins, salt and weapons were adopted as
the first method for storing value and that’s these were seen as the first currency.
After these , around 640 BCE , the first coins which dates back to an old mintry coin
site was created. In the sixth century, the invention of metal coins were ascribed to
the Lydians by Xenophanes. In 600 BCE, King Alyatts of Lydia minted what is
believed to be the first official currency, the Lydian stater that was made from
electrum.
Now to Paper Currency
Around 700 CE , China moved from coins to paper money. As at this point Europe
was still on coins money. However , banks started using paper notes for depositors
and borrowers to carry and in place of metal coins . In this case , notes could be
taken to banks at any time and exchanged for their face value in metals usually silver
or gold coins . These paper could also be used to buy goods and services.
Currency was started when different countries (ruling classes) had to buy other
currencies from other countries , which is directly affected by the government
stability to be able to hold up their currencies to either reduce the enemy’s buying
power by driving it down thereby making goods quite expensive & vice versa .
MOBILE PAYMENTS AND VIRTUAL CURRENCY
The 21st century gave rise to a lot of things , the money system is not left out.
It was in the 21st century that these money systems were birthed;
- Mobile Payments: Payments rendered through an electronic device such as a
tablet or cell phone . These can be possible with gateways like Venmo ,
Paypal etc . - Virtual Currency: These are digital representations of value that can only exist
in electronic form. Examples of virtual currencies include : tokens and
cryptocurrencies.
BITCOIN
- Bitcoin was created by the pseudonymous Satoshi Nakamoto in 2009.
- This is the first known virtual currency. All the world’s bitcoin as at November , 2021 was worth
- over 1trln or 3% of the world’s total money .
Virtual currencies have no physical mode of representing them. The main drive for
virtual currencies is its promise of lower transaction fees and the fact that its being
driven by decentralized authorities unlike the Feds who control centralized
currencies and all actions related to them.
